MCF Dividend Type Payments
Although MCF has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on CONTANGO OIL & GAS to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Fri 4:16 PM ET):
| CONTANGO OIL & GAS (MCF) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 5.75 |
6.20 |
5.75 |
+0.03 |
164K |
- |
0.1B |
MCF Dividend-Like Income Using Covered Calls
With MCF at 5.75, here's a table showing how big the annual "dividend" (ie. total annual call premium received) would need to be to attain 3%, 5%, and 10% annual yields. Also shown is the equivalent number of cents/day necessary to achieve each yield:
| Annual Yield |
Annual Premium |
Cents/Day |
| 3% |
0.17 |
0.0 |
| 5% |
0.29 |
0.1 |
| 10% |
0.58 |
0.2 |
So now we need to find out of the money covered calls that pay at least the prescribed cents/day amount of time premium. That will generate income and, because they are out of the money, leave room for some upside potential on the stock. Here are some examples:
| 3% Yield On MCF Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Jan 18 |
7.50 |
0.15 |
92 |
0.2 |
1.30 (22.6%) |
| 5% Yield On MCF Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Jan 18 |
7.50 |
0.15 |
92 |
0.2 |
1.30 (22.6%) |
| 10% Yield On MCF Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Jan 18 |
7.50 |
0.15 |
92 |
0.2 |
1.30 (22.6%) |
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